Sacramento to pay for nearly half of new $477M basketball arena

Former Milwaukee Bucks owner Herb Kohl recently cited the plans to build a new basketball arena in Sacramento, Calif., as a possible model for a public-private partnership for financing a new downtown Milwaukee area.

Those plans in Sacramento, which include the city contributing nearly half of the $477 million cost of a new arena, received final approval Tuesday night from the Sacramento City Council.

Under the 35-year deal, the city would be responsible for a $223 million subsidy, much of it financed through a parking revenue bond. The city would pay an estimated $21.9 million a year in debt service that would be paid through lease payments from the Sacramento Kings and a projected increase in parking revenue.

The city also is transferring $32 million worth of land and allowing the team to operate six digital billboards. In return, the Kings would contribute $254 million to construct the arena and develop surrounding land with a hotel, office tower and shopping.

Construction will start this summer and open in time for the 2016-'17 season.

Kohl, in an interview with NBA.com’s David Aldridge in January 2014, said he is hoping for a deal similar to one led by Sacramento Mayor Kevin Johnson for a new arena that will help keep the Kings in town. Johnson, a retired NBA player, stepped forward at the 11th hour to enlist investors to buy the Kings and garner city government support for a new arena.

“Sacramento — that’s a model, almost half and half,” Kohl told Aldridge. “They were also helped by the drama with it all.”

New Milwaukee Bucks owners Wesley Edens and Marc Lasry told the Milwaukee Business Journal's Rich Kirchen Tuesday that they will visit Milwaukee next week to handle their next orders of business, including planning for a new downtown arena, but Edens says they have no preference for a specific site. Click here to read that story.

Edens and Lasry have pledged a combined $100 million to a new arena, and Kohl is pledging $100 million more. A new arena is estimated to cost between $400 million and $500 million as the Bucks face an NBA directive to move into a facility that meets current league standards.

Lasry and Edens have said they want the Bucks to run the venue and want a decision on the project within one year.

A 48-person task force, set up by the Metropolitan Milwaukee Association of Commerce, is currently studying and may make recommendations on funding for a possible new arena, a convention center expansion and projects at the Milwaukee Public Museum, Marcus Center for the Performing Arts and the Milwaukee County Zoo.

A smaller task force of MMAC leaders is also working on a project and financing plan for the new arena.